SCMP Shares Drop on Acquisition Talks

Members of the League of Social Democrats attend a protest outside the offices of the South China Morning Post (SCMP) newspaper in Hong Kong on June 21, 2012.

SCMP Group Ltd. shares fell as much as 10% on Tuesday morning, as the publishing company resumed trading after disclosing it was in talks to make an acquisition.

The publisher of Hong Kong’s English-language daily South China Morning Post was suspended from trading Monday, after its shares rose more than 30% before the halt. It later disclosed it is “in negotiation with third parties regarding possible acquisition of a group of media companies in Hong Kong” and that the company has entered into a “nonbinding term sheet” with the target.

Speculation over a potential privatization of SCMP Group could also be stoking investor interest. In a statement dated Jan. 21, SCMP Group also said that largest shareholder Kerry Media Ltd., controlled by Malaysian billionaire Robert Kuok may buy options due to expiring Feb. 27, amounting to a just over 14% stake, in the company, which could bring the public float of the company to around 10.6%, according to the statement.

On Feb. 7, SCMP Group said that Kerry Media had exercised the options in full, and that the transfer of the shares could be completed as soon as Feb. 25.

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